Idahos largest health system, which employs hundreds of doctors, must grow larger to make any big strides toward lowering health care costs in Idaho, an economist testified Tuesday in the antitrust trial against St. Lukes Health System.
Alain Enthoven, a retired Stanford University business professor who focuses on health care, testified as an expert witness for St. Lukes, which was sued by rivals and the state and federal governments over its purchase of what had been Idahos largest independent physician practice, Saltzer Medical Group.
St. Lukes wouldnt die without them, Enthoven told U.S. District Court Judge B. Lynn Winmill. But its ability to become an integrated, efficient system is hindered if St. Lukes cannot own Saltzer, he said.
St. Lukes is hoping to convince Winmill that it is on a path to achieving lofty goals better health care at a lower cost but needs to own Saltzer to accomplish those goals.
Its plan includes a new health insurance contract that is intended to allow St. Lukes eventually to receive rebates from premiums unspent because of efficiency savings. That money would be passed on to high-performing doctors as a reward, St. Lukes officials say.
The buyout would have other positive outcomes, Enthoven said.
I think if St. Lukes can carry out their plan, that will have a very big competitive impact in Idaho, he said. It could prompt other Idaho health-care providers, including rival Saint Alphonsus Health System, to form a defensive alliance against St. Lukes, and then compete ... (based on) better quality and lower cost, he said.
Two health systems now dominate the Treasure Valley market. The Saltzer deal has increased the primary care market concentration in Nampa how much so, and whether Nampa is its own market, is up for debate.
Winmill asked Enthoven if he believes market concentration is a concern, but that health care industry problems are critical enough that perhaps risks need to be taken anyway. Enthoven said yes.
St. Lukes is paying Enthoven $600 an hour for his work, not contingent upon winning the lawsuit, according to Enthovens testimony.
Enthoven was on the stand for the entirety of Tuesdays six-hour session, which focused partly on how many doctors St. Lukes should have on its payroll. Enthoven said full-service, integrated health care systems need 60 primary-care doctors for every 100,000 people in a community. Not all of them would need to be employed, he said.
He cited several studies showing that independent doctors and loosely aligned medical organizations give patients worse care.
He said St. Lukes needs more doctors with financial ties to the system to abandon a status quo that drives up costs with poor or needless care. As things are now, health care providers earn more if they fumble lab tests, perform unnecessary surgeries or allow people to develop chronic illnesses, he said.
Under todays fee-for-service payment system, hospitals including St. Lukes now have a strong incentive to keep heads in beds admitting patients for costly hospitalization and no incentive to keep people healthy, because people with serious chronic illnesses are the geese that lay the golden eggs of revenue, he said.
Attorneys for the Federal Trade Commission and Saint Alphonsus sought to poke holes in Enthovens testimony. They suggested that Enthoven:
Had little experience doing data-heavy research of his own.
Relied on studies that were several years old and that raised concerns about physician buyouts raising prices.
Failed to fully examine Idahos health-care marketplace to see if St. Lukes initiatives are already being tried by other organizations.
Testimony continues Wednesday, when St. Lukes attorneys plan to bring in a board member to explain the systems decision-making process, among other things. The trial will, originally scheduled to end Friday, will run through Monday to make up for a one-day hiatus last week. Closing arguments are scheduled in November.
Audrey Dutton: 377-6448, Twitter: @IDS_Audrey